Where concentration hides in a ‘diversified’ statement
How desk reviews find single-driver piles that look diversified by ticker count during concentration checks in Hong Kong.
A statement with twenty lines can still be three bets. At the desk we group by shared driver before we congratulate the line count.
Look past the ticker
Two banks, an insurer, and a property name may all lean on the same local rate path. Sector labels on the statement will not always show that. In a concentration sitting we ask what would move together on a difficult Monday — then mark the pile, not only the largest single weight.
Soft limits need a definition
“Not too much in one name” is not a limit. Soft limits at our desk are written as a percentage or a dollar band with a review date. Hard limits are the lines that trigger an action conversation the same week, not a vague intention to “trim someday.”
Correlated cash flows
Concentration is not only price. If drawings, fees, and a capital call all hit in the same month, liquidity notes and concentration marks should talk to each other. We often schedule a shorter liquidity session after a heavy concentration review for exactly that reason.
A practical habit
Before your next sitting, circle every holding above a threshold you choose — five percent is a common starting point for personal books — and write one sentence on what else in the book shares its fate. Bring that page. It shortens the first hour.